Jingle Bells? ASX rides high

The ASX is closing in on 5550, reaching its highest since August in a broad-based rally that is sparking talk of Santa coming early this year.

The mood is upbeat following a night of record highs on Wall Street and further gains in key commodity prices.

“We’ve had the perfect concoction of continued euphoria within the iron ore market, another all-time high US equity markets and bond yields easing overnight which has supported out of favour mid-cap stocks,” said Atlantic Pacific Securities client advisor Gary Huxtable.

Rio, BHP and Fortescue continue to remain in strong trends, with a buy the dip mentality among investors continuously overpowering any profit taking, he said, adding that the banks are also beginning to break through their yearly ranges.

Among the blue chips hitting 2016 highs today are ANZ, up 2.1 per cent on the day and 5.3 per cent for the year, Rio, up 3.3 per cent and 40.6 per cent respectively, and Fortescue, up 2.1 per cent and a phenomenal 260 per cent since the start of the year.

“I had previously called a rally post the FOMC meeting next week, and a rally in the back half of the month – in traditional Santa Claus rally fashion,” said Australian Stock Report head of research Chris Conway.

“It appears, however, that Santa has come early. With everyone ‘knowing’ that the Fed will lift rates, and the Italian referendum out of the way, the party appears the have started,” Conway said.

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